Massachusetts Paid Family Medical Leave Act Deadline Approaches

Insurance brokers across Massachusetts have an opportunity to increase their commissions and better serve Massachusetts business owners through the Massachusetts Paid Family Medical Leave Act.

By helping your customers privatize Massachusetts PFML before October 1, you can offer premium discounts plus defer fourth quarter premium payments until January 1, 2020.

Here’s what you need to know about the important October 1, 2020 deadline approaching for business owners who want to write privatized paid family medical leave in Massachusetts.

1. Massachusetts business owners can only defer taxes on state-run PFML in MA through October 1, 2020.

Business owners must pay PFML premiums on policies written by the Commonwealth of Massachusetts by October 1, 2020. As we still battle the pandemic, many business owners continue to struggle with revenue, paying rent, or even making payroll. Some companies remain closed or at half-capacity right now. If there was ever a time to defer a mandatory expense, it’s now.

If your customers privatize Massachusetts PFML now, they don’t have to deduct payroll taxes for MA PFML premiums for 2020 until January 1, 2021.

Combined with the Paycheck Protection Program portion of the CARES Act, which permits business owners to defer the deposit and payment of the employer’s portion of Social Security taxes through December 31, 2020, this deferment can help free up cash for Massachusetts business owners at a time they need it most.

2. DBL Center brokers can save Massachusetts business owners money on PFML premiums if they privatize before October 1, 2020.

With no signature requirements or red tape, applying for a private plan exemption in Massachusetts is easy. As a broker, you can:

    Help your customers apply for the exemption
    Save business owners money on premiums
    Show your customers how to defer payroll deductions and premium payments through January 1, 2021

But only if you act now. After January 1, 2021, brokers can still write a private plan with faster, more flexible payments and better service. But premium rates will be the same as the state plan.

As Kelvin Joseph of Kool Kel Marketing stated in a recent interview, “Right now, businesses are looking to increase their revenue and reduce their expenses. [DBL Center] has a way to save people money.”

As a DBL Center broker, you can take advantage of our industry knowledge, connections, and relationships with top-rated carriers to save your customers money while providing superior service with DBL Center as your back-office staff.

3. Private plans, by law, must provide benefits equal to or greater than those required by the Massachusetts Paid Family and Medical Leave Act.

As in New York and New Jersey, Paid Family and Medical Leave plans in Massachusetts must provide benefits equal to or better than the state plan. If you could get the same (or better) product at the same (or lower) price, wouldn’t you?

It makes switching to a private plan a no-brainer, especially with The DBL Center here to help your customers get the lowest premiums available.

4. PFML benefits in MA begin January 1, 2021, with additional benefits to go into effect July 1, 2021.

As of January 1, 2021, Massachusetts will join New York to offer paid family leave benefits for employees to care for:

    A new infant, adoption, or foster child
    Family members if a spouse is deployed
    A family member with a serious health condition who is also a covered member of the military services

Beginnning July 1, 2021, PFML in MA will also cover time off to care for any family member with a serious health condition.

5. When your customers privatize PFML, you gain access to The DBL Center’s exclusive technology and service to help you track renewals, cancellations, and commissions.

For brokers across the New England region, working with The DBL Center offers many advantages to help you provide outstanding service to your customers as they navigate the confusing terrain of the Massachusetts Paid Family and Medical Leave Act.

We act as your back office staff to manage policies, collect premiums, and even track down late payments for you.

Our Broker Dashboard: Net Revenue Tracker provides all the information you need to manage your business, giving you access to renewals, cancellations, and commissions at a glance.

Massachusetts business owners may not want to think about another mandatory expense during the pandemic. They need brokers like you on their side to help them save money and receive the superior service they deserve. Reach out to The DBL Center today to help your customers privatize state mandated benefits under the Massachusetts Paid Family and Medical Leave Act.


How the Massachusetts Family Leave Act Changes Everything for Massachusetts Business Owners

Last year, Massachusetts passed the Massachusetts Paid Family and Medical Leave Act (PFML).

The law entitles all Massachusetts employees and some independent contractors paid family leave of up to 12 weeks to care for a family member and paid medical leave of up to 20 weeks for a non-work-related injury or illness. (Read more about paid leave in Massachusetts here.)

The law benefits employers and employees who may need to take leave for the above reasons. The benefit is shared, which means employers and employees each pay a portion of the premium. But the onus is on employers to adhere to the law and to understand the benefits available.

Benefits don’t go into effect until January 1, 2021, but Massachusetts business owners should educate themselves on the law now. They can start paying premiums for Massachusetts Paid Family Medical Leave as early as this month.

Massachusetts business owners can privatize benefits under the Massachusetts Paid Family and Medical Leave Act, gaining personalized service and better rates. By law, private benefits must be as good – or better – than the state-funded plan.

Business owners should not go it alone. DBL Center and its vast network of brokers can help business owners understand the advantages of privatizing PFML coverage for cost savings and better service.

Who Is Subject to the Law?

The new law applies to all the employers and businesses with more than one Massachusetts employee, though with limited exception.

The law covers:

  • Massachusetts employees
  • 1099-MISC contractors
  • Self-employed individuals

Calculating Massachusetts Paid Family and Medical Leave Act Premiums

Premium payments, often a combination of employer and employee contributions, depend upon the makeup of the company’s workforce.

To ensure an accurate premium bill, Massachusetts business owners should ensure they are correctly reporting the size and makeup of their workforce in Massachusetts to the Department of Family and Medical Leave. The total workforce generally includes:

  • All Massachusetts W2 employees (part-time, full-time, seasonal)
  • 1099-MISC contractors only if they comprise more than 50% of the total workforce

Under the law, Massachusetts employers are responsible for providing coverage for all W-2 employees. However, 1099-MISC contractors are included in the total number of covered individuals only if they comprise more than 50 percent of the total workforce, which means W2 workers and 1099-MISC contractors combined. It’s also worth remembering that a contractor is considered a 1099-MISC only if they are paid a minimum of $600 in the tax year.

Employers are not required to provide Massachusetts Paid Family and Medical Leave Act coverage to 1099 contractors, even if they make up 50% of the workforce.

Who Pays the Premium?

Employers who employ 25 employees or more are required to make a contribution of 0.75 percent of eligible payroll to the Department of Family and Medical Leave.

This contribution may be split between the employer contribution and employee payroll deductions. Payments will help the state of Massachusetts to fund both family and medical paid leaves.

Employers with less than 25 employees must make contributions to the Department of Family and Medical leave, but they are not responsible for paying the employer’s share. PFML in Massachusetts is fully funded by employee contributions for businesses with under 25 lives.

What Should Employers Do?

Employers should calculate the number of covered individuals you employ and get in touch with their accountant and payroll provider to make sure that they are prepared to start deducting premiums.

Then they should get in touch with a local broker who can help Massachusetts business owners save money by privatizing Massachusetts Paid Family and Medical Leave Act coverage.

As experts in statutory disability and PFL coverage across the Northeast United States, The DBL Center is prepared to help Massachusetts brokers help employers find the best rates for PFML.

The DBL Center and our brokers are ready to deliver superior service as business owners navigate a new world under the Massachusetts Paid Family and Medical Leave Act.